The experiences I read about on here every day horrify me. I work in the insurance industry and putting a policy into Trust in this way is a very simple but very effective means to carry out someones wishes. Do you have any proof that the insurance company actually received the instructions? Depending on what company is involved the letter should have been acceptable although admittedly some are a bit pedantic and ask for an actual form, perhaps they sent one which wasn't sent back but at least as far as the Trustees are concern you have absolute proof that the instructions were sent. Not that I think they weren't but maybe the Trustees think you are trying to get out of paying them a share of the proceeds. If you haven't cashed the cheque I'd send it back to the company concerned with a copy of the letter and tell them to reissue the proceeds to the correct beneficiary (you don't mention how old they are). You have grounds to complain to both the insurance company and the Ombudsman. In the meantime, speak to the Trustees again and get someone in authority to see sense, without wanting to tar them all with the same brush the people who answer our calls generally don't have any authority to make decisions on something as important as this. Please don't give up, I'm sure you will be able to sort this out, as it sounds to me like your mum's instructions were very clear. If you want to send me details of the insurance company concerned, I may be able to give you contact details for someone who can help. You haven't done anything wrong, and you haven't let anyone down.

Hi mondayblues.

I'm sorry to hear about your mum.

Like WIKIKEE I'm wondering whether you should apply a little pressure on the insurer here. It's apparently their failure to act which is the root cause of this issue.

thanks so much for your kind replies. i am frightened to challenge the decision made by IP but am absolutely devastated at the unfair decision. It is quite clear my mum's wishes, and makes me feel sick to think that they are not being adhered to, and that her contributions which were substantial to her on state pension are being lost, and that her only grandchild has no protection for her future, which was what she wanted to achieve. We are only talking about a couple of thousand here, after funeral costs. Mum suddenly passed away only about 6 weeks after writing to insurance company requesting that funeral costs be taken care of and any excess to go to her grandchild, my daughter. We didnt have the benefit of time, to ensure that they had actioned this, and quite suddenly mum passed away in hospital in summer 2012. I contacted insurance co and they put the wheels in motion for the policy to be encashed, I verbally mentioned to girl about money to go to daughter and she emailed me forms, which I completed and sent a copy of the signed letter back to her. At the time of them issuing refund, she simply said they had to send the money to me, didn't mention why, or if they had actioned or failed to action mum's letter....but i was so concerned about getting the funeral paid for that I let it go. At the time of the TD review, a few confidantes said not worthy of mention as the moneyy wasn't mine and I had deposited into child's account as per mum's wishes. However, I felt I better keep things right and told them, explaining it all, only to be told IP decision is to keep 50%. I don't know whether they expect these things to be challenged and whether there is room for negotiation, or whether IP decision is final and not to be questioned. I cannot begin to explain how devastated I am and I feel I have let everyone down. This is not what should have happened. Personally I do not want mum's money, I would rather have her here with me, but I know that she adored my daughter, her only grandchild and that she would move heaven and earth to protect her, the same as I would. To think that her premiums are now lost and against her wishes, is just wrong, and extremely difficult to comprehend the decision of the IP. I thank you for your post about the insurance companies and I will happily give you any info you want to enable me to fight this further. However, I must admit I am scared to jeopardise the TD and to question the decision of the IP, although it is wrong. Any thoughts most welcome???? Thanks.

Wikikee thank you so much for reply. Just to answer your question, I am 99% sure that the insurance company did not contact mum in response to her letter requesting this. I had the difficult job of clearing out her house and there was lots of paperwork, but nothing new/recent or "to be dealt with". I am so confident she would have said "there's something here from Aviva that needs dealt with/dont understand" and she didn't mention a thing.

I photocopied the said letter, for obvious apparent reasons, and even said to TD company (in case they had any doubt about validity of signature) that I have samples of signatures on prepayment cards and historic paperwork that I would be happy to send them to prove the letter was genuine, signed by policyholder (mum).... just in case they didn't believe me. However, they've just cut it off dead.......

Hi mondayblues.

I'm interested to hear from one of our experts on aspects of this situation.

I think that your trustee is in an extremely difficult position.

On the one hand you can demonstrate that it wasn't your mum's wish that this money came to you.

On the other hand, it did. Your trustee has been appointed by you to recover what you can afford to pay towards your debts. Apparently through no fault of your mum, you, or your trustee, this money was paid to you. At the point that this money was received by you, your trustee may have felt legally obligated to use some of it to help repay your creditors.

I think that the insurer is also in a difficult position. An instruction was provided to them that they failed to act on. As a result of this a loss has been suffered. It does seem as though they have some accountability questions to answer on this.

As mentioned at the start of this post I'm very interested to hear from one of our insolvency experts about the difficulties inherent in this situation for a trustee.

TDA, I totally understand they have a responsibility to creditors, but have they not also to be fair to the client. I was under impression from outset the difficult circumstances such as bereavement, critical illness etc, would be dealt with sympathetically. The email I received from trustee was along the lines of "the IP could take the £2,000 but given the circmstances has agreed to 50%" as if they're doing a favour.

Is it done in this way so that I should think "oh well, they're only taking half" and will not pursue it. The decision is wrong, quite clearly in my eyes.

I even suggested to them, prior to their decision, "why not let me lock the money in child trust fund account, so that daughter cannot access until she is aged 18, an adult"... thereby, clearly myself and husband are not benefitting from this money. They didn't even comment on my suggestion. ?????

They do have to treat their client with fairness mondayblues. However, this is balanced also by obligations to creditors, their regulators and the law.

Often they have to deal with situations such as this one where the correct answer and balance may not be black and white, and therefore where some discretion has to be exercised. It would seem that in this instance they have chosen to find that balance by splitting the money evenly.

I'm neither defending nor criticizing their decision, just trying to provide some relevant background information.

As mentioned I'm hoping one of our insolvency experts will offer a view on the challenge faced by your trustee here.

Also, I'd just point back to the fact that the responsibility for this problem happening in the first instance might in fact reside with the insurer. Where they make a mistake that results in someone losing out they are often expected to put the individual that lost out back in the position that they would have been had the mistake not happened.

Thanks TDA I appreciate your honest and helpful response. I wasn't planning on contacting the insurer, as I suspected they would just fob me off and I would get upset, and that they would also say that we shouldnt have accepted the payment if felt so strongly about it. But at the time, bereavement and funeral costs were utmost on my mind.

However, since reading the responses to far, I think I will pluck up the courage to contact them today and see what their response is. Although unsure how to word it all to them.

It is a difficult situation, mondayblues, and I do sympathise with your feelings.

I think the first port of call is to contact the insurer as discussed and find out why they did not act upon your mum's instructions. Ask them if they received the letter. If they did and accept their error then they should be able to send written confirmation to your trustee that the funds should have been paid directly to your daughter instead. Your trustee may then change their decision.

Fingers crossed for you.